Shri Narendra Pratap Bhalla, Kanpur v. The ACIT-3, Kanpur

ITA 309/LKW/2010 | 2001-2002
Pronouncement Date: 07-01-2011 | Result: Allowed

Appeal Details

RSA Number 30923714 RSA 2010
Bench Lucknow
Appeal Number ITA 309/LKW/2010
Duration Of Justice 8 month(s) 4 day(s)
Appellant Shri Narendra Pratap Bhalla, Kanpur
Respondent The ACIT-3, Kanpur
Appeal Type Income Tax Appeal
Pronouncement Date 07-01-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 07-01-2011
Date Of Final Hearing 14-12-2010
Next Hearing Date 14-12-2010
Assessment Year 2001-2002
Appeal Filed On 03-05-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH 'B' LUCKNOW BEFORE SHRI H. L. KARWA HON'BLE VICE PRESIDENT AND SHRI N. K. SAINI ACCOUNTANT MEMBER I.T.A. NO.309/LUC/10 ASSESSMENT YEAR: 2001-2002 SHRI NARENDRA PRATAP BHALLA VS. A.C.I.T.-3 7/58 TILAK NAGAR KANPUR. KANPUR. PAN:AESPB4708D (APPELLANT) (RESPONDENT) I.T.A. NO.310/LUC/10 ASSESSMENT YEAR: 2001-2002 SMT. APARNA SINGH VS. A.C.I.T.-3 7/58 TILAK NAGAR KANPUR. KANPUR. PAN:AESPB4708D (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAKESH GARG ADVOCATE RESPONDENT BY: MS. SAIFALI SWAROOP D. R. O R D E R O R D E R O R D E R O R D E R PER N. K. SAINI: PER N. K. SAINI: PER N. K. SAINI: PER N. K. SAINI: THESE TWO APPEALS FILED BY THE ASSESSEES ARE DIRECTED AGAINST THE SEPARATE ORDERS OF CIT(A)-II KANPUR DATED 15/02/ 2010 IN THE CASE OF SMT. APARNA SINGH AND 18/02/2010 IN THE CASE OF S HRI NARENDRA PRATAP BHALLA. SINCE THE ISSUE INVOLVED IN BOTH THE SE APPEALS IS SIMILAR HAVING IDENTICAL FACT AND THE APPEALS WERE HEARD TOG ETHER SO THESE ARE 2 BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAK E OF CONVENIENCE. FIRST WE WILL DEAL WITH THE APPEAL IN I.T.A. NO.310/LUC/10 IN THE CASE OF SMT. APARNA SINGH. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. BECAUSE THE CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE LEVY OF PENALTY OF `3 51 000/- U/S. 2 71(1)(C) OF THE ACT. 2. BECAUSE ON A PROPER CONSIDERATION OF FACTS AND CIRCUMSTANCES OF THE CASE THE ASSESSEE HAVING NEITHER CONCEALED HIS INCOME NOR FURNISHED INACCURATE PARTIC ULARS THEREOF THE CIT(A) AS WELL AS THE ASSESSING OFFICER BOT H HAVE ERRED ON FACTS AND IN LAW IN APPLYING THE PROVI SIONS OF SECTION 271(1)( C) OF THE ACT IN LEVYING PENALTY OF `3 51 000/-. 3. BECAUSE THE PENALTY ORDER PASSED U/S 271(1)(C) IS WITHOUT JURISDICTION BAD IN LAW VOID AB INITIO AND BE QUASHED. 4. BECAUSE THE CIT(A) HAS NOT CONSIDERED THE EXPLANATION AS WELL AS THE FACTS OF THE CASE AND HAS ERRONEOUSLY HELD THAT THE ASSESSEE IS LIABLE FOR PENALTY U/S. 271(1)(C) OF THE ACT. 2. FROM THE ABOVE GROUNDS IT WOULD BE CLEAR THAT TH E ONLY GRIEVANCE OF THE ASSESSEE RELATES TO THE CONFIRMATION OF PENALTY O F `3 51 000/- LEVIED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE ACT . 3. THE FACTS RELATED TO THIS ISSUE IN BRIEF ARE THAT THE ASSESSEE FILED HER RETURN OF INCOME U/S 139(1) OF THE ACT ON 5 TH OCTOBER 2001 DECLARING AN INCOME OF `23 08 457/-. THE CASE WAS SEL ECTED FOR 3 SCRUTINY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS TH E ASSESSING OFFICER ASKED THE ASSESSEE TO FILE THE DETAILS OF GIFT RE CEIVED OF `5 00 000/- ON 01/05/2000 AND `5 00 000/- ON 02/05/ 2000 ALONG WITH THE SUPPORTING DOCUMENTS TO PROVE THE GENUINENESS OF T RANSACTION IDENTITY AND CREDITWORTHINESS OF THE DONOR. THE ASSESSE E VIDE LETTER DATED 31/12/2002 ENCLOSED THE GIFT DEEDS AND PROOF O F FILING OF RETURN OF INCOME WITH THE INCOME TAX DEPARTMENT. THE ASSESSIN G OFFICER WAS NOT SATISFIED. HE AGAIN ASKED THE ASSESSEE TO PROVE THE IDENTITY AND CREDITWORTHINESS OF THE DONORS AND GENUINENESS OF THE TR ANSACTIONS OF GIFTS. THEREAFTER THE ASSESSEE FILED A REVISED RETURN O F INCOME ON 13/03/2003 WHEREIN THE SAID GIFTS TOTALING TO `10 00 000/- HAD BEEN OFFERED TO TAX BY STATING AS UNDER: 'THAT WHILE FILING MY RETURN THE ABOVE MENTIONED DOCUMENTS HAD GIVEN ME THE IMPRESSION THAT AS PER LAW I WILL PROVE THE IDENTITY OF THE DONOR GENUINENESS OF THE TRANSACTIONS AND CAPACITY OF THE DONOR. HOWEVER I HA VE BEEN ADVISED BY MY LEGAL ADVISOR THAT THE DEPARTMENT DUE TO ONE REASON OR THE OTHER MAY NOT ACCEPT THE SAID GI FT AND THERE MAY BE PROLONGED LITIGATION ON THIS POINT. THAT SINCE I AM NOT KEEPING GOOD HEALTH IN THESE DAYS I DO NOT WANT TO FALL IN UNNECESSARY LITIGATION AND TO ATT AIN PEACE OF MIND I HAVE VOLUNTARILY SUO-MOTTO AND IN GOOD FAITH OFFERED THE SAID AMOUNT TO TAX.' 3.1 THE ASSESSING OFFICER FINALIZED THE ASSESSMENT ON 28/03 /2003 BY OBSERVING AS UNDER: 4 'ASSESSEE HAD TAKEN GIFT OF `20 00 000/- AND OUT OF TH IS `10 00 000/- WAS TAKEN FROM HER MOTHER SMT. KAMLANI BHALLA. BESIDES GIFT OF `5 00 000/- EACH WAS STATEDLY TAKEN FROM SHRI GAJANAND GARG AND SHRI AMIT GOYAL. HOWEVE R WHEN ASKED TO PROVE THE IDENTITY AND CREDITWORTHINESS OF THE DONOR AND THE GENUINENESS OF THE TRANSACTIONS THE REVISED RETURN WAS FILED ON 13.03.2003 SURRENDERING TH IS GIFT WORTH `10 00 000/-' 3.2 IN THE COMPUTATION OF INCOME (IN THE ASSESSMENT OR DER) THE ASSESSING OFFICER HAD ADDED `10 00 000/- SEPARATELY TO T HE INCOME OF THE ASSESSEE AND INITIATED THE PENALTY PROCEEDINGS AND L EVIED THE PENALTY U/S 271(1)(C) OF THE ACT. 4. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO T HE LEARNED CIT (A) WHO POINTED OUT THAT WHILE DECIDING THE APP EAL OF THE ASSESSEE THE ASSESSING OFFICER WAS REQUESTED TO MAKE CERTAIN ENQUI RIES BY THE LEARNED CIT (A) ON THE FOLLOWING DIRECTIONS: THE APPELLANT MAY ALSO BE ASKED TO GIVE THE DETAILS OF THE DONOR AND SHE SHOULD BE CONFRONTED WITH THE FACT THA T A PERSON WHO HAS GIFTED A SUM OF `5 00 000/- CANNOT BE STRANGER TO HER AND THEREFORE SHE WAS DUTY BOUND TO G IVE HIS WHEREABOUTS. 4.1 THE ASSESSING OFFICER ON THE DIRECTION OF THE LEAR NED CIT (A) SENT LETTERS TO THE ALLEGED DONORS FOR VERIFICATION. ONE SUCH LETTER ADDRESSED TO ONE OF THE DONORS NAMELY SHRI AMIT KUMAR GOEL WAS RETURNED BACK BY THE POSTAL AUTHORITIES WITH THE REMA RK THAT THERE WAS 5 NO SUCH PERSON. THE ASSESSING OFFICER MADE THE ENQUIRIES WITH THE ASSESSEE WHO REPLIED AS UNDER: THAT WITHOUT PREJUDICE TO THE ABOVE SUBMISSIONS IT IS AGAIN HUMBLY SUBMITTED THAT I HAVE DEPOSITED THE TAX ON THESE CREDITS BEFORE ANY ADVERSE INFERENCE WAS DRAWN BY DEPT AND ON SUO MOTU ON MY OWN. 4.2 THEREAFTER THE ASSESSING OFFICER SENT A LETTER TO M R. GAJANAND GARG WHICH WAS RETURNED BACK BY THE POSTAL AUTHORITI ES WITH THE REMARK NOT FOUND. THE ASSESSING OFFICER AGAIN ASKED T HE ASSESSEE FOR VARIOUS DETAILS. IN RESPONSE TO THAT THE ASSESSEE VID E LETTER DATED 22/09/2006 SUBMITTED AS UNDER: WHEN I HAVE OFFERED FOR TAX THE GIFT AMOUNT THEN IN MY OPINION THERE IS NO REQUIREMENT LIES ON ME FOR PRODUC ING AND CONFRONTING WITH THE FACT THE PERSON WHO HAD GIV EN ME GIFT THOUGH ALL THEIR WHEREABOUTS HAVE ALREADY BEEN SUBMITTED BEFORE YOUR HONOUR. YOUR HONOUR MAY CALL THEM DIRECTLY OR MAY MAKE THE ENQUIRIES DIRECTLY FROM THE M. 4.3 ACCORDING TO THE LEARNED CIT (A) IN THE PRESENT CASE THE ASSESSEE COULD NOT PROVE THE IDENTITY OF THE DONORS. HE ALSO POINTED OUT THAT THE DOCUMENTS RELATED TO THE DONORS FILED BY THE ASSESSEE REVEALED THAT SHRI GAJANAND GARG HAD TOTAL INCOME O F `53 160/- IN THE ASSESSMENT YEAR 1999-2000 AND HAD SHOWN WITHDRAWAL OF `2 8 000/- WHEREAS SHRI AMIT KUMAR GOEL HAD TOTAL INCOME OF `52 110/- AND HAD SHOWN ANNUAL WITHDRAWAL OF `30 000/-. HE ALSO POINTE D OUT THAT THE 6 COMPUTATION OF INCOME/RETURN OF THE ALLEGED DONORS AS FILED BY THE ASSESSEE PERTAINED TO FINANCIAL YEAR 1998-99 WHEREAS TH E SO CALLED GIFT WAS GIVEN ONLY IN FINANCIAL YEAR 99-2000. THUS THOSE DOCUMENTS HAD NO EVIDENTIARY VALUE. ACCORDING TO THE LEARNED CIT (A) THE ASSESSEE HAD NOT BROUGHT ANY MATERIAL ON RECORD WHICH C OULD INDICATE AS TO HOW THESE PERSONS WERE RELATED TO THE ASSESSEE OR AS T O HOW THERE WAS SO MUCH LOVE AND AFFECTION BETWEEN THEM. A CCORDING TO THE LEARNED CIT (A) THE ACT OF CONCEALMENT/FURNISHING OF THE INACCURATE PARTICULARS WAS COMPLETE WHEN ORIGINAL RETURN DULY VE RIFIED BY THE ASSESSEE WAS FILED BEFORE THE DEPARTMENT. AS REGARDS TO T HE REVISED RETURN FILED ON 13/03/2003 WHICH INCLUDED A SUM OF `10 00 000/- AS INCOME FROM OTHER SOURCES THE LEARNED CIT (A) POINTE D OUT THAT THE REVISED RETURN WAS NOT FILED SUO MOTU AND/OR VOLUNTARI LY BY THE ASSESSEE. IT WAS FILED ONLY WHEN THE ASSESSING OFFICER HAD REQUIRED THE ASSESSEE TO FURNISH THE REQUISITE DETAILS. HE WAS OF THE V IEW THAT SECTION 139(5) DOES NOTHING MORE THAN TO PERMIT AN A SSESSEE WHERE IT MAKES A GENUINE OMISSION OR WRONG STATEMENT TO FILE A R EVISED RETURN IN TIME BEFORE THE ASSESSMENT IS MADE. THIS COULD ONLY M EAN THAT THE RIGHT TO FILE A REVISED RETURN CAN BE EXERCISED TO CU RE AN OMISSION OR WRONG STATEMENT WHEN IT WAS INADVERTENT OR ACCIDENTAL AND NOT DELIBERATE AND SUCH REVISED RETURN DOES NOT SAVE THE CO NSEQUENCES OF 7 KNOWINGLY FILING A FALSE OR INCORRECT RETURN. THE R ELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: (I) HAKAM SINGH & OTHERS VS. CIT 124 ITR 232 (ALL) (II) RADHEY SHYAM VS. ADDL. CIT [2004] 123 ITR 124 (ALL) (III) RAVI & CROSS OBJECTION. VS. ACIT [2004] 271 ITR 287 (MAD) (IV) F. C. AGARWAL VS. CIT [1975] 102 ITR 410 (GAU) (V) AGARWAL (G.C.) VS COMMISSIONER OF INCOME-TAX 186 ITR 571 (SC) (VI) RAJAN (K.M.) RAJAN AND COMPANY VS COMMISSIONER OF INCOME-TAX 186 ITR 376 (KER) (VII) SUJATHA RUBBERS VS INCOME-TAX OFFICER 194 ITR 355 (AP ) 4.4 THE LEARNED CIT (A) ALSO REFERRED TO THE EXPLNAT ION 1 AND 1(B) TO SECTION 271(1)(C) OF THE ACT AND STATED THAT THE SAID AMENDMENTS PUT FURTHER ONUS ON THE ASSESSEE TO PROVE THAT THE EXPLANATI ON FURNISHED BY HIM WAS BONAFIDE. IN THIS REGARD HE ALSO MADE A R EFERENCE TO BOARDS CIRCULAR NO. 469 DATED 23/09/1986. ACCORDIN G TO THE LEARNED CIT (A) THE EXPRESSION CONCEALMENT OF INCOME IN IT S GENERAL SENSE AND GRAMMATICAL MEANING IMPLIES THAT AN INCOME IS BE ING HIDDEN CAMOUFLAGED OR COVERED UP SO THAT IT CANNOT BE SEEN FOUND OBSERVED OR DISCONCERTED. ACCORDING TO HIM THE ASSESSEE HAD BROU GHT IN ITS UNDISCLOSED INCOME THROUGH THE DEVICE OF GIFTS WHICH IS A NON- TAXABLE RECEIPT. HE ALSO OBSERVED THAT THE EXPRESSION 'INACCURATE' REFERS TO 'NOT IN CONFORMITY WITH THE FACT OR TRUTH' AND THAT IS THE MEANING WHICH IS RELEVANT IN THE CONTEXT OF 'FURNISHI NG OF INACCURATE 8 PARTICULARS' AND THAT THE EXPRESSION 'PARTICULARS' REFE RS TO FACTS DETAILS SPECIFIES OR INFORMATION ABOUT SOMEONE OR SOMETHING. ACCORDING TO HIM THE PLAIN MEANING OF THE EXPRESSION 'FURNISHING O F INACCURATE PARTICULARS OF INCOME' IMPLIES FURNISHING OF DETAILS OR INFORMATION ABOUT INCOME WHICH ARE NOT IN CONFORMITY WITH FACTS OR TRU TH. IN THE INSTANT CASE THE ASSESSEE SHOWING THAT SHE RECEIVED 'GIFT' WAS CER TAINLY FURNISHING OF INACCURATE PARTICULARS WHEN IN FACT THE RE WAS NO SUCH GENUINE GIFT THEREFORE THE ASSESSEE FAILED TO ADVANCE ANY REASONABLE AND BONAFIDE EXPLANATION WITH RESPECT TO THE ALLEGED GIFTS; RATHER BY ACCEPTING THE GIFTS AS HER INCOME. IT HAS BEEN PROVE D BEYOND DOUBT THAT THESE SO CALLED 'GIFTS' WERE NON-GENUINE AB INITI O AND FILING OF THE SO CALLED 'REVISED RETURN' WOULD NOT SAVE THE CONSEQUEN CES OF THE PENAL PROVISION. THE RELIANCE WAS PLACED ON THE DEC ISION OF THE ITAT AHMEDABAD BENCH 'B' IN THE CASE OF HARILAL THAKERCY THAKKAR VS. CIT REPORTED IN 87 TTJ (AHD.) 311. THE LEARNED CIT (A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. BEING AGGRIEVED THE ASSESSEE I S IN APPEAL. 5. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SU BMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITT ED THAT THE RETURN OF INCOME OF THE ASSESSEE WAS DUE ON 31/10/2001 A ND THE RETURN WAS FILED ON 05/10/2001 WHICH WAS PROCESSED U/S 143(1) ON 23/11/2002 AND THE ASSESSEE REVISED THE RETURN ON 13/03/ 2003 U/S 9 139(5) WHICH WAS WITHIN THE TIME AND THE ASSESSING OFFIC ER THEREAFTER ISSUED ANOTHER NOTICE U/S 143(2) OF THE ACT. IT WAS FU RTHER SUBMITTED THAT IN THE SAID REVISED RETURN THE ASSESSEE SUO MOTU SURRE NDERED THE GIFT ON THE GROUND THAT SHE WAS NOT KEEPING GOOD HEAL TH AND DID NOT WANT TO ENTER OR TO FALL IN UNNECESSARY LITIGATION. IT WAS STATED THAT THE TAX ON THE SURRENDERED AMOUNT WAS ALSO PAID BEFORE COM PLETION OF THE ASSESSMENT. IT WAS CONTENDED THAT IN THE REVISED RETURN THE ASSESSEE DECLARED THE INCOME OF `33 08 457/- WHILE THE INCOM E WAS ASSESSED U/S 143(3) ON AN INCOME OF `33 11 960/- SO THERE WAS ADDITION OF `3 500/- ONLY WHICH WAS ON ACCOUNT OF CAR EXPENSES AN D REGISTRATION CHARGES. IT WAS STATED THAT THE ASSESSING OFFICER HAD NO T DISCUSSED IN THE ENTIRE ASSESSMENT ORDER THAT THERE WAS ANY ENQUIRY M ADE BY HIM. THE ONLY FACT RELATING TO THE RETURN HAVING BEEN RE VISED HAD BEEN DISCUSSED BY THE ASSESSING OFFICER IN THE ORDER AND EVEN IN THE PENALTY ORDER PASSED U/S 271(1)(C) THE ASSESSING OFFICER HAD NOT STATED THAT ANY ENQUIRY BEING MADE BY HIM DURING THE PENALTY PR OCEEDINGS OR AFTER THE COMPLETION OF THE ASSESSMENT. THEREFORE IT CANNOT BE SAID THAT THE SURRENDER MADE BY THE ASSESSEE WAS NOT VOLUNTA RILY. IT WAS FURTHER STATED THAT THE DIRECTION GIVEN BY THE LEARN ED CIT (A) WERE POST SURRENDER MADE BY THE ASSESSEE AND WHEN THE ASSESSEE HAD ALR EADY SURRENDERED THE GIFTS QUA WANT OF SATISFACTION DURING THE COURSE OF 10 ASSESSMENT PROCEEDINGS ITSELF AND THE AMOUNT OF GIFT REC EIVED WAS NOT THE SUBJECT MATTER OF DISPUTE THERE REMAINS NO PURPOSE OF MAKING ANY ENQUIRY POST SURRENDER BECAUSE THE ENQUIRY WOULD HAVE BEEN PURPOSEFUL IF THE SAME HAD BEEN CONDUCTED DURING THE COURSE OF ASSESSMENT AND BEFORE THE SURRENDER MADE BY THE ASSESSEE. IT WAS STATED THAT THERE IS NO EVIDENCE ON RECORD OF ANY NAT URE WHATSOEVER THAT THERE WAS ANY MATERIAL WITH THE ASSESSING OFFICER THAT MAY LEAD TO SOMEWHERE NEARER TO THE ASSESSING OFFICERS FINDING THAT THE SUBSEQUENT RETURN FILED BY THE ASSESSEE WAS NOT VOLUNTARY . IT WAS SUBMITTED THAT THE ASSESSING OFFICER ACCEPTING THE REVISE D RETURN FILED ON 13/03/2003 ISSUED NOTICE U/S 143(2)/142(1) DATED 17 /03/2003 AND THE ASSESSMENT HAD BEEN COMPLETED ON THE INCOME AS SHOWN IN THE REVISED RETURN AND THERE WAS NOTHING IN THE ASSESSMENT OR DER TO SUGGEST THAT THE REVISED RETURN WAS NOT VOLUNTARY. IT WAS CONTENDED THAT THE REVISED RETURN FILED BY THE ASSESSEE HAD NOT B EEN DISBELIEVED AND SINCE THERE WAS NOT MUCH DIFFERENCE BETWEEN THE I NCOME AS DECLARED BY THE ASSESSEE IN THE REVISED RETURN AND AS A SSESSED BY THE ASSESSING OFFICER THE QUESTION OF LEVY OF PENALTY U/S 27 1(1))(C) DOES NOT ARISE. THE RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: 1. ACIT VS. VISHAN NARAYAN KHANNA 171 TAXMAN 136 2. CIT VS. RAJIV GARG [2008] 175 TAXMAN 184 (P&H) 3. SMT. BRIJ BALA CHAUDHARY VS ITO [2003] 87 ITD 173 (L UCK) 11 4. SANTOSH NARAIN KAPOOR VS. DY. CIT [2008] 25 SOT 26 (L UCK) 5. QUDAI INTERNATIONAL VS. INCOME TAX OFFICER 2009 (13) MTC 622 (TRIB) 6. DY. CIT VS. TARUN AGARWAL 2009 (13) MTC 831 6. IN HIS RIVAL SUBMISSION THE LEARNED D. R. STRONGLY SU PPORTED THE ORDERS OF THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE SURRENDER MADE BY THE ASSESSEE WAS NOT SUO MOTU RATHER IT WAS MADE WHEN THE ASSESSEE WAS CORNERED. AS SUCH IT CANNOT BE SAI D THAT THE ASSESSEE DID NOT CONCEAL THE INCOME THEREFORE THE PE NALTY U/S 271(1)(C) OF THE ACT WAS RIGHTLY LEVIED BY THE ASSESSING OFFICER AND CONFIRMED BY THE LEARNED CIT (A). 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND CAREFUL LY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN T HE PRESENT ACASE IT IS NOTICED THAT THE ASSESSEE FILED THE RETURN OF INCOME O N 05/10/2001 DECLARING AN INCOME OF `23 08 457/- WHICH WAS PROCESSE D U/S 143(1) ON 23/11/2002. THEREAFTER THE CASE WAS SELECTED FOR SCRUTINY. IN THE MEANTIME THE ASSESSEE REVISED THE RETURN OF INCOME ON 13/03/2003 U/S 139(5) OF THE ACT BEFORE COMPLETION OF THE ASSESSMENT A ND IT IS NOT THE CASE OF THE DEPARTMENT THAT THE REVISED RETURN FILED BY THE ASSESSEE WAS BEYOND TIME. IN THE SAID REVISED RETURN THE ASSESSEE SURRENDERED THE AMOUNT OF `10 00 000/- WHICH WAS EARLIER SHOWN AS GIFTS RECEIVED 12 BY THE ASSESSEE. WHILE SURRENDERING THE AMOUNT OF `10 0 0 000/- IN THE REVISED RETURN THE ASSESSEE MENTIONED AS UNDER: 'THAT WHILE FILING MY RETURN THE ABOVE MENTIONED DOCUMENTS HAD GIVEN ME THE IMPRESSION THAT AS PER LAW I WILL PROVE THE IDENTITY OF THE DONOR GENUINENESS OF THE TRANSACTIONS AND CAPACITY OF THE DONOR. HOWEVER I HA VE BEEN ADVISED BY MY LEGAL ADVISOR THAT THE DEPARTMENT DUE TO ONE REASON OR THE OTHER MAY NOT ACCEPT THE SAID GI FT AND THERE MAY BE PROLONGED LITIGATION ON THIS POINT. THAT SINCE I AM NOT KEEPING GOOD HEALTH IN THESE DAYS I DO NOT WANT TO FALL IN UNNECESSARY LITIGATION AND TO ATT AIN PEACE OF MIND I HAVE VOLUNTARILY SUO MOTU AND IN G OOD FAITH OFFERED THE SAID AMOUNT TO TAX.' 7.1 FROM THE ABOVE IT WOULD BE CLEAR THAT THE ASSESSEE SURRENDERED THE AMOUNT OF `10 00 000/- TO AVOID THE UNNECESSARY L ITIGATION AND TO ATTAIN PEACE OF MIND. BEFORE THE SAID SURRENDER NOTH ING WAS BROUGHT ON RECORD THAT THE ADDITION OF SAID AMOUNT WAS TO BE MADE. EVEN AT THE TIME OF FRAMING THE ASSESSMENT U/S 143(3) OF THE ACT VIDE ORDER DATED 28/03/2003 THE ASSESSING OFFICER WHILE COMPUTING THE INCOME OF THE ASSESSEE ADDED `10 00 000/- BY MENTIONING INCOME F ROM OTHER SOURCES CREDIT/GIFT SURRENDERED AS PER REVISED RETURN `10 00 000/-. FROM THE ABOVE NOTING OF THE ASSESSING OFFICER IT IS CR YSTAL CLEAR THAT THE ASSESSING OFFICER ADMITTED THAT THE ASSESSEE SURRENDERED THE AMOUNT IN THE REVISED RETURN SO IT CANNOT BE SAID THA T THE SAID ADDITION WAS MADE BY THE ASSESSING OFFICER BY DETECTING ANY CONCE ALMENT OF 13 INCOME BY THE ASSESSEE OR ON ACCOUNT OF FURNISHING OF I NACCURATE PARTICULARS OF INCOME RATHER THE ADDITION WAS MADE I NSPITE OF THE FACT THAT THE ASSESSEE HAD ALREADY SUO MOTU SURRENDERED THE AM OUNT OF `10 00 000/- IN HER REVISED RETURN. THE SAID RETURN WAS FILED BY THE ASSESSEE SUO MOTU VOLUNTARILY WITHIN TIME ALLOWABLE U/S 1 39(5) OF THE ACT SO IT CANNOT BE SAID THAT THE ASSESSEE CONCEALED TH E INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME WHICH IS TH E REQUIREMENT OF LEVYING THE PENALTY U/S 271(1)(C) OF THE ACT. IN TH E INSTANT CASE THE ASSESSEE ALTHOUGH FURNISHED ALL THE DOCUMENTS RELATING TO THE GIFT IN THE SHAPE OF GIFT DEEDS ALONG WITH THE AFFIDAVIT OF T HE DONORS COPY OF THEIR PAN CARDS ACKNOWLEDGEMENT OF RETURNS FILED BY THE DONORS AND THE COPIES OF BALANCE SHEET PROVING THE GENUINENESS OF THE GIFT BUT SINCE THE ASSESSEE WAS NOT KEEPING GOOD HEALTH AND DID NO T WANT ANY CONFRONTATION AND UNNECESSARY LITIGATION WITH THE DEP ARTMENT SO TO ATTAIN PEACE OF MIND THE RETURN OF INCOME WAS REVISE D SURRENDERING THE AMOUNT OF `10 00 000/- WHICH WAS EARLIER SHOWN AS GIFTS. THE ASSESSEE ALSO OFFERED TAX ON THE SAID AMOUNT OF SURRENDER THEREFORE IT CANNOT BE SAID THAT THE ASSESSEE EITHER CONCEALED THE IN COME OR FURNISHED INACCURATE PARTICULARS OF INCOME. AS SUCH T HE PENALTY U/S 271(1)(C) WAS NOT LLEVIABLE TO THE FACTS OF THE PRESEN T CASE. 14 7.2 IN THE CASE OF QUDAI INTERNATIONAL VS. INCOME TAX OFFICER 2009 (13) MTC 622 (TRIB) THE ITAT LUCKNOW BENCH A HEL D THAT MERE RAISING OF QUERY BY THE ASSESSING OFFICER DID NOT AMOUNT TO DETECTION OF CONCEALMENT. IT CANNOT THEREFORE BE SAID THAT THE REVISED RETURN WAS FILED AFTER DETECTION OF CONCEALMENT AND WAS NOT VOL UNTARY. THE TERM 'DETECTION' ITSELF IMPLIES THE ASSESSING OFFICER HAD REA CHED A CONCLUSION BUT THE QUERY RAISED BY THE ASSESSING OFFICER WAS ONLY FIRST STEP IN DETECTION OF CONCEALMENT. IF THE ASSESSEE VOLUNT ARILY REVISED THE RETURN IT COULD NOT BE SAID THAT IT DOES NOT FUL FILL REQUIREMENTS OF SECTION 139(5) OF THE ACT. THE FACTS OF THE PRESENT CASE ARE ALSO SIMILAR TO THE FACTS OF THE AFORESAID REFERRED TO CASE. 7.3 SIMILARLY IN THE CASE OF DY. CIT VS. TARUN AGAR WAL 2009 (13) MTC 831 THE ITAT LUCKNOW BENCH A HELD THAT THE ASSESSEE HAD SURRENDERED THE AMOUNT BEFORE ANY SPECIFIC DETECTION OF UNDISCLOSED INCOME OR EVEN BEFORE THE ISSUE OF NOTICE. EVEN THOUG H A GENERAL ENQUIRY WAS GOING ON AND NOTICES HAD BEEN ISSUED TO SOME OF HIS RELATIVES AND THE AMOUNT MIGHT HAVE BEEN SURRENDERED BECAUSE OF COMPULSION OF CIRCUMSTANCES IT WAS NOT SUFFICIENT TO PENALISE THE ASSESSEE AS THE FACTUM OF DETECTION WAS NOT THERE. IN THE PRESENT CASE ALSO NOTHING IS BROUGHT ON RECORD THAT THERE WAS ANY DETECTION AT 15 THE LEVEL OF THE ASSESSING OFFICER TO SUGGEST THAT THE ASSE SSEE CONCEALED THE INCOME AMOUNTING TO `10 00 000/- WHIC H WAS OFFERED FOR TAXATION SUO MOTU IN THE REVISED RETURN. 7.4 ON A SIMILAR CASE THE PENALTY U/S 271(1)(C) WAS DEL ETED BY THE ITAT LUCKNOW BENCH A IN THE CASE OF SANTOSH NARAIN KAPOOR VS. DY. CIT [2008] 25 SOT 26 (LUCK) BY HOLDING AS UNDER (HEA D NOTE): WHETHER SINCE IN INSTANT CASE THERE WAS NO INVESTIGATI ON OF ASSESSEE BY INVESTIGATION WING OF DEPARTMENT AND ALSO THERE WAS NO INFORMATION WITH ASSESSING OFFICER THAT GIFT/CREDITS WERE FAKE OR BOGUS ON DATES WHEN ASSESSEE HAD SURRENDERED AMOUNTS VOLUNTARILY AND THERE WAS ALSO NO MATERIAL ON RECORD TO ESTABLISH THAT ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF HIS INCOME IN ORI GINAL RETURN IT COULD BE SAID THAT ASSESSING OFFICER HAD NOT DISCHARGED HIS BURDEN OF PROVING CONCEALMENT - HELD YES - WHETHER THEREFORE PENALTY LEVIED BY ASSESSING OFFICER WAS NOT JUSTIFIED AND WAS LIABLE TO BE DELETED - HELD YE S. 7.5 THE FACTS OF THE PRESENT CASE ARE SIMILAR TO THE FA CTS INVOLVED IN THE AFORESAID REFERRED TO CASE DECIDED BY THE ITAT L CKNOW BENCH. WE THEREFORE BY TAKING INTO CONSIDERATION THE VIEW TAK EN BY THE VARIOUS COORDINATE BENCHES OF THE ITAT IN THE AFORESAID REFER RED TO CASES ARE OF THE VIEW THAT NO PENALTY U/S 271(1)(C) OF THE ACT IS LEVIABLE IN THE FACTS OF THE PRESENT CASE. 8. NOW WE WILL DEAL WITH THE APPEAL IN I.T.A. NO.30 9/LUC/10. 16 8.1 THE ONLY GRIEVANCE OF THE ASSESSEE IN THIS APPEAL RE LATES TO THE CONFIRMATION OF PENALTY OF `1 77 663/- LEVIED BY TH E ASSESSING OFFICER U/S 271(1)(C) OF THE ACT. 8.2 THE FACTS RELATED TO THIS ISSUE IN BRIEF ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME ON 29/10/2007 DECLARING AN INCO ME OF `15 96 205/-. THE CASE WAS SELECTED FOR SCRUTINY. DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE HAS FURNISHED A COPY OF H ER BANK ACCOUNT WITH STANDARD CHARTERED BANK. THE ASSES SING OFFICER NOTICED THAT IT HAD A CREDIT ENTRY OF `5 00 000/- O N MAY 4 2000 WITH A REMARK GIFT. ON ENQUIRY THE ASSESSEE VIDE HIS LETTER 31/12/2002 SUBMITTED AS UNDER: GIFT OF `5 00 000/- WAS RECEIVED FROM OUR FAMILY FR IEND MR. MAHADEV BANSAL OF DELHI VIDE DEMAND DRAFT DATED 01/05/2000 COPY OF GIFT DEED ALONG WITH GIFT CONF IRMATION PAN CARD PHOTOCOPY RATION CARD PHOTOCOPY B/S INC OME TAX COMPUTATION ACKNOWLEDGEMENT OF FILING OF RETUR N OF INCOME INCOME TAX ORDER U/S 143(1) WEALTH TAX COMPUTATION BANK STATEMENT COPY THROUGH WHICH DRAFT GOT PREPARED (IS) ENCLOSED FOR YOUR HONOURS REFERENCE. 8.3 THEREAFTER THE ASSESSING OFFICER VIDE HIS LETTER DATED 28/01/2003 HAD WRITTEN TO THE DONOR SHRI MADADEV PRASAD BANSAL T O SUBMIT CERTAIN DETAILS WITH RESPECT TO AMOUNT GIVEN BY HIM AS GIFT. HE ALSO WROTE A LETTER DATED 27/01/2007 TO THE BRANCH MANAGER STAT E BANK OF PATIALA DARIYAGANJ NEW DELHI THAT WAS THE SAME BANK BRANCH F ROM WHICH 17 `5 00 000/- GIFT HAD BEEN PURPORTEDLY GIVEN TO THE ASSESSEE. VIDE LETTER DATED 27/01/2003 THE BRANCH MANAGER OF THE SAID BANK INFORMED THE ASSESSING OFFICER AS UNDER: PLEASE REFER TO YOUR LETTER. IN THIS CONNECTION WE ADVISE THAT NO SUCH SB A/C IS MAINTAINED IN OUR BRANCH IN TH E NAME OF SHRI MAHADEV PRASAD BANSAL S/O LATE SHRI PHOO L CHAND BANSAL R/O A-98/3 DILSHAD COLONY DELHI (A/C 01190003669). HOWEVER THE A/C IS IN THE NAME OF SH RI HARISH GROVER. 8.4 IN THE MEANWHILE THE ASSESSEE REVISED THE RETURN OF INCO ME ON 13/03/2003 DECLARING A TOTAL INCOME OF `20 96 205/- WHEREIN `5 00 000/- (CREDIT IN STANDARD CHARTERED BANK) WAS OFFERED FOR TAX. THEREAFTER THE ASSESSING OFFICER ISSUED NOTICE U/S 142( 1) DATED 17/03/2003 REQUIRING THE ASSESSEE TO FURNISH REASONS FOR R EVISING THE RETURN. THE ASSESSEE SUBMITTED AS UNDER: (1) THAT I HAVE REVISED MY RETURN FOR THE A.Y.2001- 02 BY TAKING THE BANK DEPOSIT OF `5 00 000/- WITH STANDARD CHARTERED BANK KANPUR A/C NO.622-1-001617-5. (1) THAT I HAVE DEPOSITED THE TAX AMOUNT OF `2 19 938/- ALONG WITH INTEREST AS APPLICABLE UNDER THE LAW ON 13.3.2003. (2) THAT THIS DEPOSIT I HAVE RECEIVED VIDE DRAFT NO.150185 DRAWN ON STATE BANK OF PATIALA BRANCH DARYAGANJ NEW DELHI-110002 DATED 1.5.2000 FOR `5 00 000/- FROM MY FAMILY FRIEND MR. VINOD GARG S/ O LATE SHRI R.S. GARG R/O B-1155 SHASTRI NAGAR 18 DELHI-110 052 AS A GIFT TOWARDS HIS NATURAL LOVE AND AFFECTION TOWARDS ME AND THE GIFT WAS WITHOUT ANY CONSIDERATION. (4) THAT THE DONOR HAS SENT ME ALONG WITH THE DRAFT OF GIFT THE FOLLOWING DOCUMENTS: SAME ENCLOSED (A) GIFT DEED (B) AFFIDAVIT TOWARDS MAKING THE GIFT. (C) INCOME TAX RETURN FILING PROOF IN SHAPE OF ACKNOWLEDGMENT OF RETURN FILING. (D) BALANCE SHEET AS ON 31.3.99 (E) PAN CARD PHOTOCOPY (F) RATION CARD PHOTOCOPY (G) WEALTH TAX RETURN FILING PROOF (H) INCOME TAX ORDER U/S 143(1) (I) BANK STATEMENT COPY (3) THAT BY MISTAKE MR. MAHAVIR PRASAD BANSAL S/O LATE PHOOL CHAND R/O A-98/3 DILSHAD COLONY-110 095 THE BROTHER IN LAW OF MR. VINOD GARG HAS SENT ME THE DOCUMENTS AS MENTIONED IN NEXT COLUMN ALONG WITH THE DRAFT UNDER WRONG IMPRESSION OF TREATING THAT THE DRAFT HAS BEEN PREPARED BY HIM WHEN THE TYPING MISTAKE HAS TAKEN PLACE IN THE DOCUMENTS GOT PREPARED BY HIS ACCOUNTANT. MR. MAHADEV PRASAD BANSAL HAS ALSO MADE A GIFT OF SIMILAR AMOUNT TO ONE OF THE COMMON FRIENDS. (6) THAT MR. BANSAL HAS SENT ME ALONG WITH THE DRAFT OF GIFT THE FOLLOWING DOCUMENTS UNDER THE WRONG IMPRESSION: (A) GIFT DEED (B) AFFIDAVIT TOWARDS MAKING THE GIFT. (C) INCOME TAX RETURN FILING PROOF IN SHAPE OF ACKNOWLEDGMENT OF RETURN FILING. (D) BALANCE SHEET AS ON 31.3.99. (E) PAN CARD PHOTOCOPY (F) RATION CARD PHOTOCOPY (G) WEALTH TAX RETURN FILING PROOF. (H) INCOME TAX ORDER U/S 143(3) 19 (I) BANK STATEMENT COPY (7) THAT WHILE FILING MY RETURN THE ABOVE MENTIONED DOCUMENTS HAS GIVEN ME THE IMPRESSION THAT AS PER LAW I WILL PROVE THE IDENTITY OF THE DONOR GENUINE NESS OF THE TRANSACTIONS AND CAPACITY OF THE DONOR. HOWEVER NOW I HAVE BEEN ADVISED BY MY LEGAL ADVISOR THAT THE DEPARTMENT DUE TO ONE REASON OR THE OTHER MAY NOT ACCEPT THE SAID GIFT AND THERE MAY BE PROLONGED LITIGATION ON THIS POINT. (8) THAT SINCE I AM NOT KEEPING GOOD HEALTH IN THESE DAY I DO NOT WANT TO FALL IN UNNECESSARY LITIGATION AND TO ATTAIN PEACE OF MIND I HAVE VOLUNTARILY SUO MOTU AND IN GOOD FAITH OFFERED THE SAID AMOUNT FOR TAX. (9) THAT SINCE I HAVE REVISED MY RETURN BY OFFERING T HE ABOVE MENTIONED DEPOSIT FOR TAX IT IS HUMBLY REQUESTED THAT THE ASSESSMENT OF THE HUMBLE ASSESSEE MAY KINDLY BE FINALIZED AT THE EARLIEST AND NO ADVERSE ACTION MY BE TAKEN.' 8.5 THE ASSESSING OFFICER FRAMED THE ASSESSMENT ON 28/03/2003 AND IN THE COMPUTATION OF INCOME ADDED A SUM OF `5 00 00 0/- WITH THE REMARK GIFT SURRENDERED AS REVISED RETURN. THEREAFTE R THE ASSESSING OFFICER INITIATED THE PENALTY PROCEEDINGS U/S 271(1) (C) OF THE ACT AND LEVIED THE IMPUGNED PENALTY. 9. THE ASSESSEE CARRIED THE MATTER TO LEARNED CIT(A) WH O CONFIRMED THE ACTION OF THE ASSESSING OFFICER. BEING AGGRIEVED THE ASSESSEE IS IN APPEAL. 20 10. THE FACTS OF THE PRESENT CASE ARE SIMILAR TO THE FA CTS INVOLVED IN THE CASE OF SMT. APARNA SINGH IN I.T.A. NO.310/LUC/1 0. THE SAID CASE WE HAVE ALREADY ADJUDICATED IN THE FORMER PART OF T HIS ORDER AND EVEN THE RIVAL SUBMISSIONS WERE SIMILAR AS WERE IN THE AFORESAI D REFERRED TO CASE. THEREFORE OUR FINDINGS GIVEN IN FORMER PART O F THIS ORDER WHILE DECIDING THE APPEAL OF SMT. APARNA SINGH IN I.T.A. NO.310/LUC/10 FOR THE ASSESSMENT YEAR 2001-2002 SHALL APPLY MUTATIS MUTANDI S. IN THAT VIEW OF THE MATTER THE PENALTY LEVIED BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT (A) IS DELETED. 11. IN THE RESULT THE APPEAL IS ALLOWED. (THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 07/0 1/2011) SD/. ( H. L. KARWA ) VICE PRESIDENT SD/. (N. K. SAINI) ACCOUNTANT MEMBER DATED: 07/01/2011 *SINGH COPY FORWARDED TO THE: - 1. APPELLANT. 2. RESPONDENT. 3. CIT (A) 4. CIT 5. DR. ASSISTANT REGISTRAR